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17 May, 2024
1 min time to read

This partnership grants OpenAI access to Reddit’s “real-time, structured and unique content” such as posts and replies, enhancing its AI tools and models, including the popular conversational AI, ChatGPT. The collaboration also promises new AI-powered features for Reddit users and moderators.

Additionally, OpenAI will become a Reddit advertising partner.

Reddit will be building on OpenAI’s platform of AI models to bring its powerful vision to life,

OpenAI stated in its blog post.

This agreement is notable because Sam Altman, CEO of OpenAI, holds an 8.7% stake in Reddit, making him the third-largest shareholder. Despite this connection, OpenAI emphasized that the partnership was led by COO Brad Lightcap and approved by OpenAI’s independent board of directors, with Altman recusing himself from the decision.

Reddit has increasingly focused on data licensing agreements as a core part of its growth strategy. In its IPO prospectus, Reddit disclosed contracts worth over $200 million with customers like Google. The company reported a 450% year-over-year increase in non-ad revenue in its first earnings report as a public company, mainly due to these agreements. Following the announcement of the OpenAI deal, Reddit’s stock saw an 11% increase in extended trading.

Reddit CEO Steve Huffman highlighted the value of authentic user-generated content during the company’s March earnings call, stating,

As more content on the internet is written by machines, there’s an increasing premium on content that comes from real people.

However, the partnership might face pushback from Reddit users concerned about how their data is being monetized. Similar data agreements have sparked controversy, as seen with Stack Overflow, where users protested by deleting top-rated answers, leading to the restoration of posts and user bans by the platform.